Research Desk Line-up: Belden Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 9, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Franklin Electric Co., Inc. (NASDAQ: FELE) ("Franklin"), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=FELE, following the Company's disclosure of its third quarter fiscal 2017 operating results on October 24, 2017. The water and fuel pumping systems Company notched its record net sales and earnings per share (EPS) for any third quarter in the Company's history and exceeded earnings expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
Get more of our free earnings reports coverage from other constituents of the Industrial Electrical Equipment industry. Pro-TD has currently selected Belden Inc. (NYSE: BDC) for due-diligence and potential coverage as the Company reported on November 01, 2017, its financial results for Q3 2017 which ended on October 01, 2017. Register for a free membership today, and be among the early birds that get access to our report on Belden when we publish it.
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Franklin reported sales of $311.1 million in Q3 2017, up 30% compared to sales of $239.8 million in Q3 2016. The sales increase was primarily due to acquisition-related sales, as well as sales volume and price increases. The Company's organic sales grew 8% on a y-o-y basis, while foreign currency translation increased sales by less than 1%.
During Q3 2017, Franklin's consolidated gross profit advanced 21% to $103.8 million from $85.5 million in Q3 2016. The Company's gross profit was 33.4% as a percentage of net sales in the reported quarter, down approximately 220 basis points versus 35.6% in the prior year's same quarter. The decline in gross profit margin percentage was partially attributable to the inclusion of the Distribution segment which impacted the margin by 70 basis points, while the balance was attributed to product and geographic sales mix shifts and higher raw material costs.
For Q3 2017, Franklin's selling, general, and administrative expenses (SG&A) were $71.0 million compared to $55.4 million in Q3 2016; an increase of about 28%. The increase in SG&A from acquired businesses were $15.8 million. Excluding the acquired entities, the Company's SG&A remained flat on a y-o-y basis in the third quarter of 2017.
Franklin reported GAAP earnings of $0.52 per diluted share in Q3 2017 versus $0.50 in Q3 2016, up 4%. In the reported quarter, the Company's EPS was $0.53 before restructuring compared to $0.48 before restructuring in Q3 2016; representing a 10% increase and which was in-line with analysts' expectations of $0.53.
Water Systems - During Q3 2017, Franklin's Water Systems segment's sales jumped 8% to $196.5 million versus $182.0 million in Q3 2016. The segment's organic sales grew approximately 8% on a y-o-y basis.
For Q3 2017, the Water Systems segment's sales in the US and Canada grew 11 % on a y-o-y basis. In the reported quarter, sales of Pioneer-branded dewatering equipment soared 90% on a y-o-y basis, resulting from the continued diversification of customers and strengthening in US oil and gas end markets. Sales of groundwater pumping equipment increased about 10% on a y-o-y basis, on broad-based strength in both residential and agricultural systems. The Water Systems segment's sales in markets outside the US and Canada overall increased by about 5%, led by improved sales in Europe, including higher sales of Pioneer-branded equipment, and the Middle-East and Africa, but were offset by lower sales in the Latin America and Asia/Pacific markets.
For Q3 2017, the Water Systems segment's operating income was $28.3 million, down 6% on a y-o-y basis and the operating income margin was 14.4% versus 16.5% in the year-ago comparable period. The Water Systems segment's operating income before restructuring was $29.3 million in Q3 2017, up 4% compared to the year-ago corresponding period and the operating income margin before restructuring was 14.9% compared to the 15.5% in Q3 2016. The decline in operating income margin was primarily related to product sales mix shifts and higher raw material costs.
Fueling Systems - During Q3 2017, Franklin's Fueling Systems segment's sales were a record $63.5 million, up 10% versus $57.8 million in Q3 2016. The Fueling Systems segment's sales in the US and Canada grew approximately 10% on a y-o-y basis. The increase was across all product lines, with particular strength in piping and containment systems. Outside of the US and Canada, the Fueling Systems segment's revenues advanced 18%, led by stronger sales in Europe and Asia.
For Q3 2017, the Fueling Systems segment's operating income totaled $17.1 million, reflecting a growth of approximately 13% compared to $15.2 million in Q3 2016, while the operating income margin was 26.9% during the reported quarter; an increase of 60 basis points from the 26.3% of net sales in the year-ago same period.
Distribution - During Q3 2017, Franklin's Distribution segment's sales were $68.1 million, down approximately 6% on a y-o-y basis, and primarily driven by supply chain disruptions and weak end market conditions in the Southeast region of the United States. The segment's operating income was $2.0 million, while the operating income margin was 2.9% in the reported quarter.
Franklin ended Q3 2017 with a cash balance of about $60 million versus about $104 million at the end of 2016. The decrease was primarily due to acquisitions and increased working capital. The Company's inventory levels were $301 million at the end of the reported quarter versus $203 million at the year-end of 2016.
Franklin narrowed its full-year 2017 adjusted EPS guidance to $1.88 to $1.92.
At the closing bell, on Wednesday, November 08, 2017, Franklin Electric's stock was marginally up 0.46%, ending the trading session at $43.75. A total volume of 93.24 thousand shares have exchanged hands. The Company's stock price surged 12.04% in the last three months, 16.98% in the past six months, and 18.24% in the previous twelve months. Moreover, the stock rallied 12.47% since the start of the year. The stock is trading at a PE ratio of 23.22 and has a dividend yield of 0.98%. The stock currently has a market cap of $2.09 billion.
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